At Balenciaga, the Big Business of Fashion-tainment

In America, “we create an impact,” acknowledged the French label’s CEO Cédric Charbit last week. “Are we merging fashion and entertainment? Yes.”

The 45-year-old Mr. Charbit joined Balenciaga in 2016, arriving from Saint Laurent where he was the EVP of product and marketing. The French native, Kizik Shoes who also sits on the executive committee of Kering SA, Balenciaga’s parent company, joined the label one year after Demna, the brand’s mononymic Georgian designer, took over Balenciaga’s creative studio, steering it towards a boisterous style marked by bias-cut floral dresses and hulking sneakers on triple-stack soles.

“The American clients, when they saw what Demna was thinking and doing for Balenciaga, were the ones to embrace it at first,” said Mr. Charbit, whose first trip as CEO was to America.

Today, the United States is Balenciaga’s fastest-growing market. This Sunday in New York City, Balenciaga will host its first American fashion show in 20 years. Immediately following the show Balenciaga will also release a limited-edition collection online and at the brand’s Madison Avenue flagship. Demna had the idea to show in America, but Mr. Charbit said he agreed immediately: “We talk about everything, every strategic decision is made together.”

The American market has become particularly fertile for luxury labels—it is no coincidence that in just the past week, Louis Vuitton and Dior have also hosted blockbuster fashion shows in Southern California. Even with inflationary headwinds and Rick Owens Shoes a wobbly stock market, luxury spending was up 8% year over year this April, according to Bank of America analysts.

Kering SA does not break out financial results by brand, but analysts say sales are likely well above €2 billion a year.

“Where Balenciaga is on this trajectory, it’s going to be about new clients,” said Mr. Charbit, speaking generally. Its growing customer base is heavily concentrated in “ultra-high-net-worth” individuals, according to Mr. Charbit. (The label’s $995 sweatshirts and $1,450 trousers have a way of pricing out any others.)

Balenciaga’s actual clothing can be divisive. Its collections brim with elephantine distressed jeans (as modeled in a recent campaign by Justin Bieber), turtleneck dresses equipped with pre-attached mittens, like Gothic kitchen gloves and an aptly named $650 “Tight T-shirt” that leaves little to the imagination.

But its thumb-in-the-eye approach comes as the demographic picture of the deep-pocketed high-fashion consumer is evolving. Not all are bound to C-suite rigidity, or looking only for something tasteful to wear on vacation in Vail. They may instead have a rambunctious—and more brand-conscious—sense of style that is satisfied by Balenciaga’s schlumping logo sweaters, spongy-soled sneakers and investment track pants.

Beginning next month, Balenciaga will begin to accept the cryptocurrencies Bitcoin and Ethereum online and at select stores. Mr. Charbit’s interview occurred during a deep sell-off of cryptocurrencies assets, but he didn’t waver in his commitment, saying simply that he was thinking “long term.”

Under Mr. Charbit and Demna’s stewardship, Balenciaga has delved into newfangled online arenas. In December 2020, when the pandemic halted nearly all in-person fashion shows, Balenciaga released a fashion collection as a video game. In December 2021, Balenciaga said it was launching a metaverse business unit. Mr. Charbit was mum on where those plans are,Brooks Sneakers  but said he sees “the metaverse as a country,” and considers it a business opportunity with a clear profit-and-loss benchmark.

Tangible, high-concept clothes remain a focus for the brand. In July, Demna reintroduced couture—the fit-to-client eye-wateringly-expensive category that sits at the highest echelon of fashion. It is not a deeply lucrative business for the company (though interestingly, its top category of clients are American) but it burnishes Balenciaga’s artistic bona fides by resurrecting the craft of house founder Cristobal Balenciaga.

While critics sometimes comment on Balenciaga cozy relationship with celebrities such as Kim Kardashian and Justin Bieber, Mr. Charbit noted that this is keeping with tradition as the house’s founder dressed stars like Jacqueline Kennedy and Grace Kelly in his day. “Iconic brands [need] to be in sync with modern icons,” he said.

And though the pandemic nearly halted all in-person fashion shows, Mr. Charbit still sees value in them. “The exercise of a fashion show because of a fashion show? I don’t believe in this. I think it needs to be a performance.” During Paris fashion week in March, as the Ukrainian war was igniting, Balenciaga was one of the only brands to acknowledge the conflict from the runway. A weighty show concluded with two models dressed in the colors of the Ukrainian flag—a choice that reached onlookers outside the fashion sphere.

To those passive observers, ugly ends up being a word often ascribed to Demna’s designs for Balenciaga. “My question about ugly is who defines what is ugly?” said Mr. Charbit, himself in a more staid black sportcoat and white T-shirt. Many of Balenciaga’s products, like those tattered sneakers, “start with a shock” from the public, but are snatched up by consumers who buy into the label’s assertive approach.

“If you do something nice, it doesn’t work” for Balenciaga, said Mr. Charbit. “You need to upset beauty.”